Swanson leads Cartridge World to growth despite upheaval of both business and culture

It wasn’t your typical corporate relocation when Cartridge World Inc. moved its North American headquarters from California to Illinois in 2011.

For starters, most of the employees who had worked at the Emeryville, Calif., headquarters were not making the trip to the new offices in Spring Grove, Ill.

“Institutional knowledge disappeared if it wasn’t retained in the system,” says William D. Swanson, CFO of the global ink and toner printer cartridge retailer and CEO of North American operations.

“Even then, it might be in the system, but it’s not in the minds, hearts and thoughts of the people coming on board. So that was interesting. It was one of the most difficult challenges to overcome when we came here.”

It was difficult, but it was a challenge that Swanson and the leadership team at Cartridge World felt needed to be tackled. The company had slumped during the recession and found itself struggling to get back on its game.

“We ended up in a situation where as a company, we had significantly more expenses than were sustainable based upon our revenue stream,” Swanson says. “So it was really taking a company that was stuck and creating negative cash flow and then creating positive cash flow and, more importantly, value for its constituents.”

Making the situation even more interesting for Swanson was the fact that he, too, was new to Cartridge World, which is owned by Wolseley Private Equity in Australia. He joined the company in May 2011 as global CFO and didn’t become North American CEO until July 2012.

So the task was rather daunting.

Swanson needed to get himself up to speed with what the company was all about while at the same time, he worked to integrate new employees into a new culture in its new home that would enable the company to generate better financial results. He also had to engage franchisees at the company’s 650 stores across North America. The company has about 2,275 store employees in North America and 50 corporate employees.

Fortunately, Swanson brought a lot of confidence to this seemingly difficult mission.

“If you have good, compelling arguments and a good, solid vision that people can buy in to and understand, you get people to move forward in that direction,” Swanson says.

Build your team

The move to Illinois wasn’t just about rejuvenating the business. It would put Cartridge World in a more central location with which to work with its franchisees since two-thirds of its U.S. locations were east of the Mississippi River. It would also provide closer proximity to the company’s technology partner.

But those are physical details. The act of building a new culture from the ground up that would help the company start growing again wasn’t going to be as easy.

“You don’t know what you don’t know,” Swanson says. “That can be a very difficult place if you’re going down fat, drunk and stupid and you don’t know where you’re going. Any road will take you there. You better get clarity and you better help the new team understand that clarity.”

Swanson looks for three things to help determine if someone can be a strong member of his team.

“First of all, I make sure everybody has a consistent view of what success looks like,” he says. “Where are we trying to go? What does success look like both tangibly and intangibly? Paint that picture. Create specific numbers and reinforce that. Ask them to repeat it so that I can gauge their understanding.”

The next is one-on-one time with the person talking about his or her place in the company.

“I have a formal one-on-one session with my direct reports on a weekly basis, but informally, we meet and chat in the morning or sometimes we’ll be here late,” Swanson says. “It really is making sure I can gauge how they view their responsibilities, the tasks they are working on and the judgment they are exercising as they make decisions and take action.”

Finally, Swanson wants to know what kind of initiative they have to get things done and make things happen.

“Some people might see opportunities and others wait for those opportunities to be pointed out to them,” Swanson says. “Some take action and some wait for action to be assigned. When we have a company where staff has been reduced by 50 percent, I need people who can take an initiative and exercise good judgment moving in the direction that we need to move in.”

The goal is exactly the opposite of creating drones who will follow his every word. He wants people who see success the way he does and have the desire and energy to achieve it. But he has no problem if they have a different way of making it happen.

“They are more likely to achieve success when they get to choose the path that they are going to go down, as long as it’s consistent with the vision, and I know they can exercise good judgment,” Swanson says. “If they try to go down my path, they are not going to completely understand it, and they’re probably never going to do it exactly like me, so I’m not going to be thrilled by it.”

Show respect

As important as it was to get his leadership team on board with his plan, Swanson very much needed to have a good relationship with his franchisees if Cartridge World was to succeed.

The key to a good relationship with any group of people is to be respected.

“When you’re dealing with franchisees, what you have to know is a lot of them put up their life savings to be in this, and they’ve committed their financial resources to the success of the business,” Swanson says. “That has to be understood. They have to know that you respect them and what they’re doing and how they are going about it.”

You owe it to them to listen to what they have to say when they have opinions about how the business should be run.

“It doesn’t mean I’m going to agree with them,” Swanson says. “I may, I may not. If I disagree, I’ll present it in a way that maintains their esteem and doesn’t put them down but rather presents another issue. I like to think of it as though we’re all businesspeople around the table. The issue is on the table; it’s not with any of us around the table.”

When you establish that foundation of respect, you can then move more easily into addressing some of the things that may be holding your business back.

“If you see things that are happening in the business that aren’t consistent with what it is you as a business are trying to accomplish, then you have to say, ‘Why are we doing these things?’” Swanson says. “What might seem like a good idea in the short term because maybe you had some high-priced consultants or you had something that convinced you as a company that this is the direction you want to go in, maybe it just wasn’t a well-thought-out idea. Those things happen. They happen everywhere.”

When you jump right into a decision without gaining the understanding of what your people are seeing and experiencing and any other pertinent variables, you run the risk of making a big mistake.

“Stephen Covey said it in one of his seven habits,” Swanson says. “‘Seek first to understand before being understood.’ I’m not sure all leaders do that. It can be a struggle to not jump in and say, ‘No, do it this way.’ Now certainly, if you’re going off a cliff, you’re going to stop that from happening.”

Cartridge World was struggling, but it wasn’t going off any cliffs. So Swanson took the patient approach.

“It’s constantly learning and taking a look at what you did yesterday,” Swanson says. “What went well and what didn’t go well? What did we learn from it? How do we take yesterday’s or today’s experiences and use that to shape what we’re going to do tomorrow?”

One thing Swanson does not do as he is guiding the company is step on the toes of people who hold leadership positions at Cartridge World.

“I have an open door, and if anyone ever wants to talk to me, they’re always welcome to talk to me,” Swanson says. “But I’m not going to go around my leadership team if I don’t need to. I respect them and what they’re doing.”

The results of recent changes have begun to pay off. With a redefined sense of roles and responsibilities, the company is back on a growth trajectory. In 2012, it launched Cartridge World Express, a mobile business that offers more than 400 ink and toner products for every major brand of printer, copier, fax and postage machine. It also expands the company’s mission of recycling to keep printer cartridges out of landfills.

“You have to be firmly committed to the direction you’re going and why you’re going in this direction and you can’t be short on communicating the vision and direction and the reasons why decisions were made,” Swanson says. “That has served us well.” ●

How to reach: Cartridge World Inc., (815) 321-4400 or www.cartridgeworld.com

My first job was caddying. I went to the golf course and the caddy master said, ‘Well you’re a little too small. Why don’t you come back next year?’ I came back the next week. He said, ‘Weren’t you here before?’ I said, ‘Yeah, I was. You told me I was too short. But I think I can do it, and I’d like the opportunity to show you.’ So I did and I was able to caddy for a couple years before I turned 16 and could get a real job.

Who has been your biggest influence?

I was in public accounting and then I left and worked in private industry for three brothers for around 20 years. One of the brothers, Arnold Miller, was just fantastic. That’s where I developed the way I think about business, running a business and the values that I have that are very important to me.

Who would like to meet and why?

Warren Buffett or Sam Walton; both of them for their purity in running a business and saying, ‘What is it we’re trying to accomplish? Keep all the self-serving stuff out of the way.’ Both of them are very successful in understanding what it is they are trying to accomplish and then to be able to do it by focusing on the fundamentals that it takes to get done. Not on wishes, not chasing rainbows, but truly understanding the fundamentals of what it is you’re trying to do. Work utilizing those fundamentals. If you do that, good things will happen.